Airbnb Squares Up To Fight Traditional Hotels On Their Own Turf

Airbnb co-founder and CEO Brian Chesky speaks during an event Thursday, Feb. 22, 2018, in San Francisco. Airbnb is dispatching inspectors to rate a new category of properties listed on its home-rental service in an effort to reassure travelers they're booking nice places to stay. The Plus program, unveiled Thursday, initially will only cover about 2,000 homes in 13 cities. That's a small fraction of the roughly 4.5 million rentals listed on Airbnb in 81,000 of cities throughout the world. (AP Photo/Eric Risberg)

This was always going to happen: how could traditional hotels hope to protect themselves from the disruption created in their sector by Airbnb? Over the years, the hotel industry has forced us to accept a series of practices we hate, but about which we can do little. How do we reserve a hotel room? At best, it’s confusing and time consuming: we have to choose from a seemingly infinite number of offers and prices from an infinite number of platforms, and in the end, we all too often end up with something that isn’t what we thought we were getting. When we get to the hotel, we might find that the room we wanted is not available and that we don’t like the one we’re offered. In short, the experience we thought we were getting is far from guaranteed.

But why is it so difficult for us to have those expectations met? For example, why can’t hotels put photos and videos of all their rooms on the web, allowing us to choose which one we want? Instead, they bamboozle us with bogus categories, telling us: "At this time we do not have any rooms with sea views as you requested, but instead, we can give you a higher category room.” What does that really mean, if I can’t confirm for myself how many rooms have really been booked on the dates I want? Why, if the experience is supposed to be so important, is checking in or out such a hassle, when it could be done via an app? Why is one’s room so often not ready when one arrives, despite having said what time one is arriving? Why hotels ask us if it's our first time at the hotel? Shouldn’t they have a record of our previous stay? Why do hotels frequently cite high occupancy rates as an excuse for not meeting our expectations? Are they not able to add up reservations, deduct cancellations and give everyone what they requested when they made the booking?

Decades of so-called optimization has allowed traditional hotels to come up with rules and systems that favor them, and not their guests, who are just supposed to shrug their shoulders when the fine print is pointed out to them. Let’s be honest, most of the time, a good experience at a hotel depends on how far you are prepared to protest and demand your rights. And few of us like to kick up a fuss at reception.

Now, Airbnb is proposing to guarantee our experience. All said, considering what many hotels get away with, including quite a few so-called luxury establishments, disruption on the basis of providing a better customer experience shouldn’t be too hard. They will start by separating the economic transaction from the enjoyment of the stay by using an app, while at the same time focusing obsessively on the needs and desires of the client, as many internet based companies already do. For Airbnb,loyalty programsare not just about special offers and points, as they are with traditional hotels, but instead are a way to ensure and improve the customer experience. The Airbnb customer is usually looking for much more than just a bed for the night, and wants a whole bunch of other things that add up to an experience. Most traditional hotels have never been able to offer this, and instead simply offer us a room, and usually the one that suits them. To be honest, all too often, the hotel stands in the way of us having the experience we want.

Why does Airbnb think it can do a better job than traditional hotels? Fundamentally, because it is run differently, from the leverage it can gain from its community, and through fully optimized information intensity and permission levels, two of the key variables in digital transformation. While some traditional hotels are finally pondering digital transformation, Airbnb was born digital and continues to evolve at a faster rate than its competitors. In less than a decade, Airbnb has gone from making tourism available to just about anyone, to offering properties of all kinds, some of which are not available anywhere else: luxury boats, impressive apartments in the heart of a city, or even islands. From that first apartment with three inflatable mattresses to the more thanfour million properties available in 65,000 cities in more than 191 countries where more than 260 million customers stay, Airbnb has come a long way, and the plans are even more ambitious: one billion travelers in 2026. Today, the San Francisco startup is a force to be reckoned with by city halls around the wall, a key player in working out regulations that will protect the quality of life of residents while allowing people with properties there to exploit them sustainably.

The company has beendebating the pros and consofan IPOfor some time now, having grown rapidly from modest beginnings to the company managing more overnight stays in the world, ahead of all the major traditional hotel chains. The first phase of disruption in the hotel industry came from a competitor with no fixed assets that pulled a flanker on the traditional players by tearing up the rule book and inventing its own, entering a field closed to them, prompting howls of protest.

Now, comes the next phase of disruption, with Airbnb taking the battle to the traditional hotels’ own field. You ain’t seen nothing yet.

Teaching Innovation at IE Business School since 1990, and now, hacking education as Senior Advisor for Digital Transformation at IE University. BSc (Universidade de Santiago de Compostela), MBA (Instituto de Empresa) and Ph.D. in Management Information Systems (UCLA).